The Louisiana Governor has signed into law a bill that authorizes the Commissioner to enter into NIMA or other cooperative compacts or agreements with other states.
Louisiana is among the latest states to enact Nonadmitted and Reinsurance Reform Act (NRRA) related implementation legislation. During the session NAPSLO provided draft legislation and offered comments.
The NRRA mandates that beginning July 21, 2011 the insured's home state will be the only state with jurisdiction over surplus lines transactions and the only state that can require a tax be paid by the broker. As a result states are bringing their laws into compliance.
Louisiana HB469 is primarily a premium tax bill that authorizes the Commissioner to enter into NIMA or other cooperative compacts or agreements with other states and to maintain the state's revenues from surplus lines insurance premium taxes and to comply with the NRRA.
The bill provides that "there shall be a tax on all premiums paid for surplus lines insurance" covering multistate risks and for which Louisiana is the home state of the insured and "surplus lines brokers and independently procuring insureds shall remit the tax to the Commissioner...." The tax rate applied to premiums allocated to Louisiana is 5% and the tax rates and fees applied to premiums allocated to other states participating in a tax sharing system with Louisiana are the tax rates and fees of those other state.
The bill would require brokers and insureds to file quarterly reports on multistate risks when Louisiana is the home state of the insured, on a form prescribed by the Commissioner which would conform to any tax sharing agreement or compact and would retain the current quarterly reporting requirement for single state risks.
The bill incorporates the NRRA's definition of "home state," but does not address any of the NRRA reforms other than regarding payment of nonadmitted insurance premium tax when Louisiana is the home state.